Business Studies Definitions Unit 1:Entrepreneur: an individual with a flair for business opportunities and risk taking. The term is oftenused to describe a person with the entrepreneurial spirit to set up a new business.Profit: what is left from revenue after costs have been deducted. There are many types of profiteach is listed within the profit and loss account.Democratic Leadership: means running a business or a department on the basis of decisionsagreed among the majority.Autocratic Leadership: assumes that information and decision making are best kept at the top ofthe organisation.Paternalistic Leadership: is reminiscent of the way fathers treat their children, i.e. deciding what isbest for them. (Autocratic leadership style).Laissez Faire: is a political and economic philosophy which believes that governments shouldavoid interfering in the running of a business or any other part of the economy,McGregor's Theory:Theory X workers are motivated by money. unless supervised closely, workers will under perform. that workers will only respect a tough, decisive boss. that workers have no wish or ability to help make decisions.Theory Y workers seek job satisfaction no less than managers. that, if trusted, workers will behave responsibly. that low performance is due to dull work or poor management. staff have a desire and the right to contribute to decisions.Demand: is the desire to own a good or a service. It is affected by consumer tastes, price,incomes, advertising and the popularity of other products.Supply: a willingness to produce and deliver goods or services demanded by customers at a givenprice.Price (Equilibrium Price): is the notion of a market where demand and supply are equal to eachother. In a product market, this will produce and equilibrium price in the labour market, andequilibrium wage and in the market for capital, and equilibrium rate of interest.Factor's that effect Demand: Price Incomes Actions of Competitors and their Prices The Firm's own Marketing Activities Seasonal Factors Fashion/Taste The State of the Economy

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Other FactorsFactors that effect Supply: Price of the commodity Price of factors of production Price of related goods Technology TaxMarket Orientation: businesses setting the wishes of customers and what they are willing to pat asthe top priority to guide production and marketing decisions.Market Research (Primary & Secondary): studying a market to gather data, particularly on factorsinfluencing demand for the product.…read more

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Structural, i.e. when the economy changes in a fundamental way and people are made unemployed. The coal and shipbuilding industries of the UK are examples. Cyclical, i.e. when demand is low at the bottom of the trade cycle.Inflation: is a sustained rise in the average prices of goods within an economy. It is also useful tounderstand it as a fall in the purchasing power of money, since it is usual for wages to move aheadat least as fast as the price level.…read more

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Gross/Net Profit Margin (Ratio): is the percentage of sales revenue which is gross profit/net profit.Business Plan: a report detailing the marketing strategy, production costings and financialimplications of a business startup. The plan is is useful for helping the entrepreneur to think his orher idea through, though it is mainly drawn up to persuade investors or lenders to inject capital intothe business.Cash Flow Forecast: a detailed estimate of a firm's future cash inflows and outflows per month.…read more

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Span of Control: the number of subordinates answerable directly to the manager. It can bedescribed as `wide' if the manager has many direct subordinates or `narrow' if there are a few.Chain of Command: is a vertical line of authority within an organisation enabling orders to bepassed down through the layers of hierarchy.Decentralisation: means devolving power from the head office to the local branches or divisions.…read more

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Niche Marketing: a corporate strategy based on identifying and filling relatively small marketsegments. This can enable small firms to operate profitably in markets dominated by largecorporations.Research & Development: means scientific research and technical development. This is directedat improving the product, rather than finding out what the consumer wants and thinks.Gross Domestic Product (GDP): is the sum of the value of a country's output over the course of ayear.…read more